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How so? Most of these companies will take a hit but will be fine Alphabet, Amazon, Google, etc can write off their entire investments in AI and will be a-OK. The pure AI companies will obviously be dead.
This is what people said about the banks in 2007. Just because the big players’ balance sheets can take the hit doesn’t mean the wider economy is insulated.
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These companies are spending more money than budgets of many countries enough to add 2+% to the US GDP so the amount of loss for if it comes all crashing down will be huge.
Loss to who? Now all of a sudden, we are caring about investors and sovereign funds? And I think we passed the threshold for crash down for AI, even if AI companies wont be that profitable. Nvidia/cloud providers will be profitable as long as there is demand for AI.
Remember the model: 1. Outspend and outlast your competition until you have market dominance. Win over and lock in your customers with sweetheart deals. 2. Enshittify and squeeze your customers to pay back your debt. If you're using AI, you're not paying the true cost right now because we're in phase 1. Be ready for phase 2.
The big labs are actively moving into the application layer, where they’ll have more pricing power. Maybe that layer will end up with a Mac (Anthropic) vs Windows (OpenAI) vs Linux (open-source) dynamic as well if they can create a moat. But so far it’s pretty easy to move between providers.
It’s weird to me that people here suddenly seem to care about profitability for relatively early stage companies just because they’re “AI”. I know a traditional SaaS company I worked for that IPO’d years ago and still has no signs that they can be profitable (and many others like it) and nobody seems particularly concerned.
The weird thing is that so many people believe that inference is unprofitable. There are large open weights models that companies run at a profit while charging far less than what OpenAI and Anthropic charge. Deepseek V4 just made their 75% off deal permanent and it was already very cheap.
Yes, you have to consider costs of training the models, but as usage grows it’s going to become a smaller and smaller part of the business.
I think we will see some data center businesses and AI companies blow up, but I think the people expecting the entire AI scene to blow up because prices quadruple are going to be disappointed.
Sure they're torching money on building consumer LLMs, but they seem to be doing very well optimizing things like ad ranking
https://engineering.fb.com/2025/11/10/ml-applications/metas-...
https://engineering.fb.com/2026/03/31/ml-applications/meta-a...
So Nvidia is basically farming everyone else?
Other hardware manufacturers also wastly more profitable - RAM, SSD, HDD and literally everyone in datacenter supply chain.
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These companies are blowing through an incomparable amount of resources. If their bravado is misplaced, the economic impacts will be far more significant.
How so? Most of these companies will take a hit but will be fine Alphabet, Amazon, Google, etc can write off their entire investments in AI and will be a-OK. The pure AI companies will obviously be dead.
The stock market. Stocks crash, companies go belly-up, tons of people get laid off, unemployment spikes, people die. I don’t give a shit about the companies themselves. I do give a shit about who they employ, both directly and downstream, and the job market that will result from many of them losing their jobs.
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It’s weird to me that profitability is so thoroughly dismissed by the software tech industry because of an assumption that the tech industry will always be “early stage” and “high growth.” We can look at a “success story” like Uber and it is still net negative over its entire existence. This is a business that’s in a literal monopoly/duopoly status in most markets it operates in with vastly reduced regulatory burden…
And also: AI is basically the only thing anyone is talking about. Yeah, Uber existed and it's known about and was advertised and such. It has not overwhelmed every topic ever like the current LLM mandate has been. People are getting sit down and told they MUST engage with this stuff. How has the sheer saturation of LLMs not resulted in profit? It has dominated the conversation, center stage, of every news outlet for…
The numbers for Meta are pretty misleading, I assume the $3 billion is something like direct generative AI revenue? Sure they're torching money on building consumer LLMs, but they seem to be doing very well optimizing things like ad ranking https://engineering.fb.com/2025/11/10/ml-applications/metas-... https://engineering.fb.com/2026/03/31/ml-applications/meta-a...